The debt service ratio is defined as
(a) the ratio of total debt to export earnings.
(b) the ratio of total debt to GDP.
(c) the ratio of payments on foreign debt to export earnings.
(d) the ratio of payments on foreign debt to GDP.
Question 2 - Successful adjustment to external imbalance is likely to involve
a. expenditure-reducing policies
b. expenditure-switching policies
c. import compression
d. devaluation of the national currency
e. all of the above
Question 3 - A Eurocurrency is a
A) bank account denominated in a currency other than the nation in which the deposit is located.
B) bank account in the eurozone.
C) bank account denominated in euros in the EU.
D) bank account located in England.
Question 4 - The most economically efficient exchange rate system is one in which
A) residents of a nation can reallocate their resources at minimal costs.
B) the central bank in a nation requires the least intervention in domestic money markets.
C) the central bank in a nation requires the least intervention in foreign exchange markets.
D) real income fluctuations are minimized.
Question 5 - The debt service ratio is the ratio of
(a) external debt to the size of the service sector.
(b) external debt to total GNP.
(c) internal debt to the size of the service sector.
(d) internal debt to total GNP.
(e) none of the above.
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